5.1. ERMUSR 04-14-2009 - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES ELK RIVER, MINNESOTA SCHEDULE OF FINDINGS AND RESPONSES -CONTINUED DECEMBER 31, 2008 Findine Description 2008-2 Declaration for Payment Condition: Auditing for legal compliance requires a review of the Utilities deposits and investments. Our study indicated an instance ofnon-compliance that we believe is required to be remedied. The Utilities' vendor checks do not carry a required declaration on the back of the check. Criteria.• Minnesota statute 471.38 requires that each declaration for payment be signed to the effect that such account, claim, or demand is just and correct and that no part of it has been paid. The statute is satisfied if on the back of Utilities checks is a declaration as defined in Minnesota statute 471.391 reading "I declare under the penalties of law that this account, claim or demand is just and correct and that no part of it has been paid." Cause: Effect: Recommendation: Management Response: Summary of Prior Year Findings 2007-1 Segregation of duties 2007-2 The Utilities did not have monitoring procedures to consider the statute requirements. The Utilities was out of compliance with this State statute. The Utilities has a stamp with the declaration, which we recommend using until new checks with the pre printed declaration are available. Management agrees with the finding and will use the stamp until new check stock is ordered. This fording has been resolved in 2008. Procedures were implemented by management to improve internal control procedures related to cash disbursements, payroll, and investments. We commend management on the improvements. and will continue to monitor these procedures in the future to ensure they are followed properly and provide adequate internal control. Material Audit Adjustments This fording was replaced by fording 2008-1 in the current report. We believe that finding 2008-1 more appropriately addresses the internal control finding. -42-